The credit card industry's consolidation advanced a step on Tuesday as Associates First Capital Corp. agreed to buy KeyCorp's $1.3 billion credit card portfolio for one of the richer premiums in such deals this year.

The deal highlights Associates' desire to expand its bank card business through agent bank relationships, and would ratchet the company a notch higher in the card portfolio rankings, to 13th-largest MasterCard and Visa issuer, with about $7 billion of receivables. Including private-label programs, Associates now controls some $11 billion in receivables. The sale also fulfills KeyCorp's pledge to quit the business.

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